Just bought one of these at an antique shop and was totally befuddled, but I'm an engineer so I enjoy the puzzle of getting things to work. Here's what worked for me, just successfully sewed up the bottom of a pants pocket.
Make sure that the thread will flow freely from the spool, through the two metal eyelets (looks like the end of a safety pin), and through the needle hole. If there's any resistance it will bind up. There's a thing on the side that looks like a pulley with a spring that you'd think the thread should go through but it doesn't. That's only to hold the thread when you're not using it.
I held it with the sharp end of the needle pointing away from me and the spool nearest my body, but you can probably do this either way. To get started, have the thread through the needle but NOT into the bottom of the machine. Pull about an inch or two of thread out the front (away from your body).
To start the sewing, lift the metal flange on the bottom (has two metal tabs on it and the hole that the needle will go through) and insert the fabric under it so that the needle will just barely touch the edge of the fabric when you squeeze. Each time you squeeze, the machine will pull the fabric through one stich-length, but you have to be sure that it's not binding. After the first few stiches, pause and make sure the end of the thread isn't caught under the flange, it likes to get caught there and give you trouble. Pull the end of the thread away from there.
After that, keep squeezing, make sure you squeeze it all the way down each time. Also make sure that the fabric sides easily through the flange. If there are folds in the fabric it might try to bind up. Any binding pretty much screws up the stich, so be careful.
When you get to the end of the stich, pull it out a few inches so you have some thread to tie off so the seam doesn't unravel. Do the same for the end you started with.
When you're done, secure the thread in that spring pulley so that it doesn't unwind itself in the drawer.
I didn't find anything on how to work this other than this unanswered question, so hopefully this helps someone!
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